Three former chancellors have voiced concerns that George Osborne's Help to Buy scheme could add to housing bubble. Photograph: Andrew Hasson/REX

Three former chancellors have warned George Osborne that his Help to Buy scheme could inflate the housing bubble. Alistair Darling, Lord Lawson and Lord Lamont urged him to rethink his flagship mortgage support scheme because of a "raging housing boom".

Lord Lamont, who was Conservative chancellor of the exchequer under John Major, said Osborne was "well aware of the potential problems" with the Help to Buy programme.

He told the Financial Times: "My concern is that it will become harder for young people to buy a home." He said: "What will happen is that demand can be increased quickly, through measures like Help to Buy, but supply can only be increased slowly."

Lord Lawson, who served under Margaret Thatcher said that the government should end the scheme in London where house prices have rocketed. Elsewhere in the country, the maximum value of houses bought under Help to Buy should be halved to £300,000, he said.

Labour's Alistair Darling also warned that the government was in danger of "repeating the same mistakes". He said: "Unless supply can be increased substantially we will exacerbate that situation with schemes like Help to Buy."

The Treasury said: "We're dealing with a very specific issue in addressing a market failure after the financial crisis, which has been about affordability and availability of mortgages."